Congress Ready to Stimulate

With the stock market shaky and economic worries rising to the top of the campaign issue pyramid, you can expect members of Congress to return to town in the next two weeks with money on their minds.

Speaker Nancy Pelosi (D-Calif.) is no Ben Bernanke - Congress can't just wave a wand and cut interest rates or convince people to run to the nearest Best Buy (for what it's worth, Capitol Briefing did his part by buying a new TV over the holidays). In fact, Congress can't do much of anything quickly, which is why members on both sides of the aisle -- and on the stump -- are already starting to strategize on a possible economic stimulus package that wouldn't likely see floor action in either chamber for several weeks.

On the campaign trail, Sen. Hillary Rodham Clinton (D-N.Y.) is unveiling today what she dubs "an aggressive $70 billion stimulus package" that deals with housing, energy and job assistance. She's also calling for Congress to provide "$40 billion in direct tax rebates to working and middle class families if the economy continues to worsen." And at the Republican debate Thursday night in South Carolina, the candidates were asked whether the economy is headed into a recession and offered a potpourri of ideas.

President Bushsaid on Jan. 4 that he looked forward to working with Congress on legislation "to deal with the economic realities of the moment." For the White House and Hill Republicans, that likely will mean broad-based tax cuts and making previously-passed tax cuts permanent. Democrats like Clinton, meanwhile, are more inclined to call for narrower tax cuts and spending increases, likely targeted at the middle class.

So the stage is set for a message war divided along familiar lines. Pelosi issued a veiled warning Monday against tax cuts for the wealthy, saying, "We will propose pro-middle-class, pro-growth, and pro-job creation initiatives that ensure our economy works for all Americans, not just the privileged few." On the same day, House Minority Leader John Boehner (R-Ohio) cautioned against any continuation of the "tax-and-spend policies embraced by this increasingly out-of-touch Democratic Congress."

Democrats have been harping for some time about the worsening "Bush economy," and the last thing they want is to be outflanked on one of their signature issues by a White House that they view as responsible for these problems in the first place.

But even as a lame duck, Bush has the bully pulpit, so the next date to watch is Jan. 28, when he will likely unveil some details of a stimulus proposal during his last State of the Union address. Democrats will be ready to pounce with their own plan, and then the actual stimulating can finally begin.

UPDATE: Pelosi and Senate Majority Leader Harry Reid (D-Nev.) sent a letter to Bush today calling for a bipartisan meeting on a stimulus package, one they believe should be "timely, targeted and temporary." It's likely such a meeting will happen, less so that they will actually strike a deal that both sides can live with.